BINTANGNEWS.com –While economic growth
in the first half of the year was driven by fiscal policy, private investment
will serve as the economic driver in the second half, allowing the momentum of
the country’s economic recovery to continue in 2017, an economist has said.

Mandiri Sekuritas
chief economist Leo Putra Rinaldy said in the first half of this year,
government spending mainly contributed to the country’s economic growth, which
had consistently improved both in capital and non-capital spending.

However, he said, it was
likely that the driver of economic growth would shift to the private sector in
the second half, following improved business and investment confidence in the
country after the return of Sri Mulyani Indrawati to the Cabinet as finance
minister and her decision to adjust the revised 2016 state budget, so as to
make it more credible.

"There will be
shifting economic drivers in the second half, thanks to lower fiscal risk after
Sri Mulyani adjusted the budget to be more sound and realistic," Leo said
during a media gathering in Bandungon Friday.

He said Sri Mulyani’s
decision had given positive messages to businesspeople. Previously,
businesspeople were somewhat reluctant to invest because of high fiscal risks
stemming from the unrealistic state revenues, he went on.

"Business
confidence and investment are expected to increase as indicated by improvements
in the business and consumer index," Leo said.

Mandiri Sekuritas has
forecast the economy to grow by 5 percent by year-end and continuing
improvement in the following year in the range of 5.1 to 5.2 percent growth.***